Gas cuts doubled as row with Belarus rumbles on

by Andy Potts

Gas supplies to Belarus have been cut further as President Dmitry Medvedev insists Gazprom will not accept "pies or pancakes" to pay off the debt.

Earlier Minsk had suggested settling the $200 million account with machinery or technology - an echo of the early 90s when workers were sometimes paid in their factory's products - but Moscow is only interested in cold, hard cash.

"Over the past twenty-four hours, Belarus has not taken any steps to repay the debts for the delivery of Russian natural gas and from 10 hours in the morning of June 22, a 30 per cent cut in planned gas supplies to Belarus was introduced," Miller said. On Monday supplies went down 15 per cent and Miller has said he's willing to impose 85 per cent cuts if a deal is not reached.

Gazprom spokesman Sergei Kupriyanov also complained about a lack of progress - and said Belarus was threatening to take gas from a transit pipe heading for Europe.

"We have received a letter from Belarus First Deputy Prime Minister Semashko without any specific proposals on debt repayment. The letter contains a threat that Belarus will start taking gas from the transit pipe for the needs of the national economy, if there are further cuts in gas supplies," he said.

This could have a knock-on effect across Europe, but Gazprom deputy chairman Alexander Medvedev promised to do everything possible to prevent this.

He proposed introducing a team of independent observers to monitor the flow of Russian gas, while prime minister Vladimir Putin suggested that gas could be routed via Ukraine until the row is resolved.